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Seventh Circuit affirms district court decision that "electronically printed" receipts under FACTA does not include receipts emailed to consumers

On August 10, 2010, the U.S. Court of Appeals for the Seventh Circuit upheld an earlier ruling by the Northern District of Illinois Eastern Division that email order confirmations are not “electronically printed” receipts under the Fair and Accurate Credit Transactions Act (“FACTA”) amendments to the Fair Credit Reporting Act. Shlahtichman v.1-800 Contacts Inc., Case No. 09-4073 (7th Cir.; Aug. 10, 2010) is available here. The court affirmed the dismissal of Shlahtichman’s complaint against 1-800 Contacts Inc. that involved an electronic order confirmation containing Shlahtichman’s credit card expiration date.

This is the first federal appellate court decision to focus on FACTA’s truncation requirements for electronically printed transaction receipts. FACTA’s truncation requirements, 15 U.S.C. § 1681c(g), prohibit the “electronic printing” of any receipt at “the point of the sale or transaction” that contains the expiration date of a consumer’s credit or debit card or more than the last five digits of the credit or debit card account number.

The Seventh Circuit followed the majority view among district courts that “the term ‘electronically printed’ reaches only those receipts that are printed on paper.” The court noted that a printed receipt brings to mind “a tangible document” and “ordinarily connotes recording it on paper.” The court rejected Shlahtichman’s argument that the use of “electronically” in section 1681c(g) evidences a congressional intent to broaden the meaning to include more modern usages. The court instead interpreted that language to suggest an intention to capture receipts that are printed by a machine rather than credit card slips or receipts that are imprinted or handwritten.

Next the court looked to the overall statutory context of FACTA and noted that the truncation requirements apply to receipts “that are printed and ‘provided to the cardholder at the point of the sale or transaction.’” The court concluded that “the statute contemplates transactions where receipts are physically printed using electronic point of sale devices like electronic cash registers or dial-up terminals.”

Finally the court noted that even if email order confirmations were “electronically printed” receipts for FACTA purposes, the dismissal of Shlahtichman’s complaint was appropriate because Shlahtichman sought the statutory damages authorized only for willful violations of the truncation requirement and 1-800 Contacts had not willfully violated the statute.

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